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The official then points out that right in this bill Congress, as a matter of policy, has determined that the Department in question may purchase automobiles, but whether or not Congress grants the money, is another proposition.

Senator BYRD. They would not have to grant it by specific appropriation.

Mr. HESTER. The general legislation of 1914 would prohibit the use of any money for the purchase of passenger-carrying vehicles unless the appropriation act itself specifically authorized it.

Representative VINSON. Mr. Hester, this section 514 is really general authority, is it not?

Mr. HESTER. Yes.

Representative VINSON. And it does not repeal anything?

Mr. HESTER. That is right. It is general authority to the Bureau of the Budget to consider estimates for the purposes specified in section 514.

Representative COCHRAN. Haven't they got the general authority

now?

Mr. HESTER. No. If Congress has not said that the particular department can purchase automobiles the Bureau of the Budget can today say, "We will not consider it", and that ends it. Section 514 says that the Bureau of the Budget must consider it, for Congress in that section has said, as a matter of policy, that the Bureau should do so. But Congress may or may not appropriate and expressly make funds available for the purchase of passenger-carrying vehicles.

Representative COCHRAN. Your position is you want to take away from the Bureau of the Budget the control it now has over the executive branch of the Government by saying you will not send to the Congress your request; is that it?

Mr. HESTER. This section merely requires the Bureau of the Budget to consider estimates. For instance, suppose you go to the Budget and say, "We want $100 for newspaper clippings." Then they will say, "We will only give you $10", but they will have to give you something. The Congress itself has determined that you may have newspaper clippings.

Senator BYRD. Does Congress itself specifically have to set up the item in the appropriation bill?

Mr. HESTER. Yes.

Representative VINSON. Not only set it up in the appropriation bill but to set it up in the legislative bill. You have to itemize certain specific things for the division to purchase, and this is a general proposition that dispenses with that.

Representative COCHRAN. In other words, you are putting the Bureau of the Budget in the position where, if it so desires, it can submit the proposition to the Congress.

Mr. HESTER. Yes.

Senator BYRNES. He can submit an estimate only.

Representative COCHRAN. Under present conditions the Bureau of the Budget is controlling in that it says, "Congress says we cannot do this." Under this bill the Bureau of the Budget can submit it if it so desires.

Mr. HESTER. That is right.

Senator LA FOLLETTE. Mr. Chairman, some time ago you asked Mr. Buck to summarize this situation,

The CHAIRMAN. Yes; and he was prevented from doing that by questions on what I conceive to be more or less collateral subjects, and subjects about which we are hardly sufficiently informed to make a reliable investigation. Are you prepared to answer the question I submitted to you sometime ago-namely, what do you maintain are the principal advantages of the system of accounting that you propose as compared with that which now prevails?

Senator BYRD. Mr. Chairman, may I supplement that with this request: Let him also state the additional cost of this new system. The CHAIRMAN. That will come later. Let us have this first. One question at a time, if you please.

Mr. Buck. If I may summarize it briefly, I would say that the proposed plan would give the Government of the United States an accounting system that would be thoroughly modern, in keeping with the present volume of expenditures, and would centralize responsibility in the great fiscal Department, the Treasury.

At the present time, as I understand it, there is no accounting system that may be called a general-control system. Recently, the General Accounting Office has attempted to set up such a system within its office. There is in the Treasury a Division of Bookkeeping and Warrants, which maintains appropriation accounts, allotment, and apportionment accounts at the present time.

There are also four or five other sections of the Treasury keeping accounts. The public-debt service has a system of accounts relating to the public debt. The disbursement office has a system of accounts to protect the disbursing officer in the discharge of his duties. The Treasurer of the United States has a system of cash account, showing receipts and disbursements. The Customs Bureau has a system of accounts, showing its collections and its expenditures; so does the Internal Revenue have a similar system.

There is no centralized control at the present time. What we propose under this new system is a set of accounts that will give promptly the information that is needed by the Executive, that will summarize it as frequently as it may be needed, and that will make the information available to Congress.

In connection with that system of accounts there is a series of checks or controls which, we believe, would insure that very little money would be expended improperly. That is one side of the picture.

The other side of the picture is that we propose to give Congress an Auditor General, an officer who would be a disinterested auditor of all the accounts of the Government. We propose that this officer can go into the accounting offices and audit not only the vouchers, statements, and documents pertaining to the individual transactions, but that he can audit the entries on the books, which is not done at the present time.

We propose further that he can check upon all the receipts from the great revenue-collecting agencies of the Government, to see that the collections have been properly accounted for; that is, the revenues that have been taken in. That checking, as you know, is not very effectively done at the present time.

Then when he has completed this work we propose that he shall make a report to a committee of Congress. This report will be made as frequently as the necessities of the case seem to demand. The committee will meet between the sessions of Congress and will discuss the findings of the Auditor General and, in discussing them, it will have the administrative officers before it to settle all questions that may arise or doubts that may be in the minds of the Auditor General or the committee.

By this process Congress will have two things that it does not have now. It will have accurate and frequent information on the fiscal operations of the Government, coming to it from this central accounting system. It will also have an independent check upon all this information through its own officer-the Auditor General-who is daily checking all the fiscal operations of the administration under the Executive.

I think that, Mr. Chairman, summarizes briefly the plan that is proposed.

Senator TOWNSEND. What authority would he have?

Representative COCHRAN. You indicate that the collections of the Government today are not properly audited.

Mr. Buck. I understand the General Accounting Office does not do much auditing of receipts.

Representative COCHRAN. Please explain.

Mr. Buck. There has been quite a bit of discussion about the auditing of receipts extending over a great many years.

Representative COCHRAN. That the collections of our Government are not properly audited?

Mr. Buck. There is no check on the collections of the Government, except the internal checks, provided by the major bureaus that collect the revenues, namely, Internal Revenue and Customs. There isn't even an assessment record kept on the outside by an independent officer.

Representative COCHRAN. Tell me what the hundreds of clerks assigned to the Post Office Department are doing who are checking their accounts all the time.

Mr. Buck. So far as I know, Mr. Cochran, they are doing just what you said they are doing, checking the accounts.

Representative COCHRAN. And auditing them also are they not? Mr. Buck. I presume so.

Representative COCHRAN. If they do not do that why do they send that great big list down to Congress every year showing those that are in arrears?

Mr. Buck. That Post Office situation is something, Mr. Cochran, that I would advise you to look into.

Representative COCHRAN. I am asking you for information.

Mr. Buck. I think that is a very deplorable situation myself. Representative COCHRAN. Can you give us a recommendation as to the change that could be made to put in a perfect system there?

Mr. Buck. I would set up an accounting system under the direction of the Post Office Department itself instead of depending upon the General Accounting Office to maintain the accounts for that great Department. That is what I would do.

Representative VINSON. You just said that the same sort of system used in the Treasury and Customs is not a real audit.

Mr. Buck. The proper checks have not been devised and applied in the Treasury Department. Of course, I realize that Customs and Internal Revenue are both under the Treasury Department, but those two units are now self-sufficient, so far as checking their own receipts is concerned.

Senator BYRD. Under your plan they will still check their own receipts, both of them being in the Treasury Department.

Mr. Buck. By this Bureau of Fiscal Control we propose that a statement of the large assessments of income taxes, for example, will be put on books outside the division of the Bureau of Internal Revenue. If there are any subsequent changes in the assessments, they will then be checked by this outside officer who is not responsible for making either the assessments or the collections.

Senator BYRD. Still it is in the Treasury Department and is under the Secretary of the Treasury.

Mr. BUCK. Oh, yes; certainly.

Representative VINSON. Under your plan, will you dispense with the present system of auditing in the Treasury and Customs?

Mr. BUCK. Oh, no; we will add to it and strengthen it. What I am saying is that it is deficient at the present time and needs to be strengthened.

Senator BYRD. The only difference is that instead of having an independent outside audit they will be audited, in the Treasury Department.

Representative VINSON. They are now.

As I understood him he

said they had the audit in the Treasury and Customs. Mr. BUCK. They have internal checks.

Senator BYRD. He was criticizing the fact that they did not have an audit. in the Post Office Department.

Representative VINSON. I do not think Mr. Buck contends there is no audit whatever by the Comptroller General of the receipts of the Government; does he?

Mr. Buck. Not a very satisfactory one.

Senator BYRD. I think that should be explained to the committee and an opportunity given to the Comptroller General to speak on the subject. I understand there is an audit of the receipts.

Mr. BUCK. There is an audit covering the warrants.

Senator BYRD. Under your plan that audit is taken away from this independent officer and given to the Secretary of the Treasury who, in that event, will audit his own receipts.

Mr. BUCK. When you argue with me on that point you forget our proposed plan gives the Congress a check and an audit on the whole business.

Representative MEAD. Mr. Buck, let me suggest as a weakness in your plan, that you fail to strip the Treasury Department of its spending agencies; therefore, there is a lack of control in that that agency is a spending agency, and a spending agency and a checking agency is never a very satisfactory method. I mean a spending agency and checking agency in the same department.

Mr. BUCK. Yes.

Representative MEAD. Is it the thought of your committee to strip the Treasury of all of its spending activities, like the Procurement Division, for instance?

Mr. BUCK. I am probably more agreeable to the condition of accountability that you speak of for the Treasury Department than the committee would be. Let us just look at what the Treasury Department has at the present time, that is, its fiscal functions. It has the great revenue-collecting agencies, Internal Revenue and Customs. Now, you would not think of taking that away from the Treasury, I

assume.

Representative MEAD. No.

Mr. Buck. All right. That makes one division of the proposed Treasury Department, a division or an office of revenue, we will say. Then it has the Treasurer of the United States and the disbursing officer, and some other smaller units. You will admit that those are fiscal functions, those ought to be in the Treasury Department. Well, that makes another large unit. We will call it receipts and disbursements, or something like that, since it has under it the collection, or we might say the custody, disbursement, and cash accounting for the Government.

Then the Treasury has a Division of Bookkeeping and Warrants under the Commissioner of Accounts and Deposits, which maintains, as far as we have any such thing at the present time, a centralaccounting system. It has its limitations, and those limitations are quite serious. It is concerned pretty largely with expenditures and the control of appropriations. Well, you, I suppose, would admit that that is a proper function of the Treasury.

Suppose we add to it those functions that we spoke of taken over from the General Accounting Office, namely, the supervision that the General Accounting Office now exercises over departmental accounting, and this final settlement we have been talking about, because we believe that is an executive function, since it is control. We will separate that-Mr. Cochran, I think, agreed with me that that could be done we will separate that from the General Accounting Office and we will take that over to the Treasury. So that makes a composite unit of central accounting, central control over expenditures, and to the same degree it should be over receipts. Well, that then becomes an important unit in the Treasury. So we have three important units that we cannot take away from the Treasury, because they are primarily fiscal functions, namely, revenue control, central accounting, and the receipt, custody, and disbursement of money. The latter includes the public debt. Senator BYRD. What about the Coast Guard?

Mr. BUCK. What?

Senator BYRD. What about the Coast Guard?

Mr. BUCK. Well, in as far as the Coast Guard is doing work for Customs perhaps it properly belongs there, but insofar as it is saving human life perhaps it belongs somewhere else.

Senator BYRD. How about Secret Service?

Mr. Buck. Well, some of that belongs in the Treasury, undoubtedly.

Representative MEAD. What about the purchase of supplies and material in erecting Federal buildings?

Mr. BUCK. I was coming to that. We have outlined three major divisions in the Treasury Department. We come now to the fourth one and that is procurement, which is an important function in the Treasury at the present time. There is some honest difference of

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